Alternative forest management strategies to adapt to climate change: An economic evaluation for Germany

Since the year 2018, the yield and management situation in German forest enterprises is characterized by extreme weather events (storms, draught) and, consequently, bark beetle calamities, leading to a significant above-average occurrence of damaged timber. In addition to processing the damaged timber, forest managers are challenged to develop and implement silvicultural adaptation strategies to climate change in order to ensure future wood production and long-term viability of these enterprises. In our study, we aimed to estimate the long-term economic impacts of an active climate change adaptation strategy compared to a passive, successional adaptation strategy on the forestry sector under consideration of climate change induced survival probabilities, using - and enhancing - the Forest Economic Simulation Model (FESIM). Based on our study's assumptions about tree species changes, we find that active forest conversion demands greater initial financial investment. However, in the long run, it proves to be economically more sustainable despite persistent risks. This is due to the potential for higher growing stock, felling volume, and ultimately improved yields in the future. The findings from our analysis offer valuable insights and decision-making guidance for both forest enterprises and forest policy, regarding the two adaptation strategies.